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    AUDITORS REPORT ON CORPORATE SOCIALRESPONSIBILITY

    (INDIA-BASED FACTORIES)

    APOLLO-ELTEX INDIA PVT. LTD.

    (MANGO'S SUPPLIER: PARTNERS AGENCY)

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    CSR AUDITORS REPORTTABLE OF CONTENTS

    1. INTRODUCTION............................................................................................ 3

    2. SUBJECT-MATTER....................................................................................... 3

    3. SCOPE........................................................................................................... 3

    4. AUDITING APPROACH................................................................................. 4

    4.1. AUDITING CRITERIA.............................................................................. 4

    4.2. DOCUMENTARY REVIEW...................................................................... 4

    4.3. PERSONAL INTERVIEWS WITH EMPLOYEES..................................... 4

    4.4. INTERVIEWS WITH REPRESENTATIVES OF THE COMPANY............ 4

    4.5. INSPECTION OF THE FACTORY........................................................... 5

    5. AUDITING TEAM ........................................................................................... 6

    6. GENERAL DATA ON AUDITED FACTORY................................................... 7

    7. RESULT OF COMPLIANCE WITH THE CODE OF CONDUCT .................... 8

    7.1 CHILD LABOUR ....................................................................................... 8

    7.2. FORCED LABOUR.................................................................................. 9

    7.3. HEALTH & SAFETY AT WORK............................................................. 10

    7.4. RIGHT TO ORGANISE AND COLLECTIVE BARGAINING................... 14

    7.5. DISCRIMINATION................................................................................. 15

    7.6. DISCIPLINARY ACTION, HARASSMENT AND ABUSE....................... 16

    7.7. WORKING TIME.................................................................................... 17

    7.8. REMUNERATION.................................................................................. 18

    7.9. ENVIRONMENTAL ASPECTS .............................................................. 19

    7.10. COMPLIANCE WITH LEGISLATION................................................... 20

    8. APPENDICES .............................................................................................. 21

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    CSR AUDITORS REPORT1. INTRODUCTION

    In modern society corporate social responsibility has become an increasinglyrelevant part of companies operations. The concept of a sustainable

    organisation that creates economic, environmental and social value both in theshort and long termthereby contributing to the progress and well-being ofpresent and future generationsrequires companies to adopt a proactiveapproach. As part of their commitment to social values, companies shoulddevelop initiatives to achieve their social responsibility objectives and ensurethat they are fulfilled adequately. In order to ensure that these objectives aremet across the entire organisation, companies need to draw up ethical codes,or codes of conduct that provide an optimal tool for attaining these objectives.Companies should also ensure that the suppliers that have adhered to the codeof conduct comply with its requirements, as well as drawing up improvementplans to ensure that the principles set out in the relevant code of conduct are

    implemented effectively.

    AUREN AUDITORS I CONSULTORS BARCELONA, S.A. have staffspecialising in the implementation, assessment and control of Corporate SocialResponsibility.

    PUNTO FA, S.L. (MANGO) asked us to conduct an audit of its suppliers (textilefactories) in India, to ensure that they comply with the companys Code ofConduct (RC/COD/RC/01). This document contains the auditors report drawnup by our firm according to principles of independence and objectivity, and ithas been prepared to the best of our knowledge.

    2. SUBJECT-MATTER

    A series of controls were carried out to ensure that the textile factories in whichproduction is subcontracted comply with the requirements of the Code ofConduct (RC/COD/RC/01) drawn up by Mango.

    3. SCOPE

    This report is concerned with the operations carried out on behalf of MANGO inthe India-based textile factories. The audit conducted as part of this report wasperformed on the 20th of December 2006. It deals with the application of theprinciples set out in the MANGO Code of Conduct in relation to the companysactivities.

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    CSR AUDITORS REPORT4. AUDITING APPROACH

    The audit was conducted on site by a team of two auditors. The followingsection outlines the criteria that were taken into account in conducting the audit,

    as well as the different stages of the audit.4.1. AUDITING CRITERIA

    The auditing criteria used are those laid down by the following documents andorganisations:

    The Mango Code of Conduct (RC/COD/RC/01) The Child Labour (Prohibition and Regulation) Act, 1986 The Contract Labour (Regulation and Abolition) Act, 1970 The Employees State Insurance Act, 1948

    The Minimum Wages Act, 1948 The Trade Unions Act, 1926 The Maternity Benefits Act, 1961 ILO Conventions referring to labour matters (see appendix) Auditing Requirements specified by AUREN AUDITORS

    CONSULTORS BARCELONA, S.A.

    4.2. DOCUMENTARY REVIEW

    We have reviewed a number of documents relating to the companyscommercial and payroll management. We went to the offices of the department

    responsible for the companys payroll and commercial management andrequested to see the documents that we thought could be of interest to us.Among the documents reviewed were employment contracts and staff records,a sample of 20 pay slips chosen randomly, the records kept by the companywith regard to the employees performance, and other documents relating to thecompanys ordinary business activities.

    4.3. PERSONAL INTERVIEWS WITH EMPLOYEES

    The company provided us with a room isolated from other employees and theirrepresentatives. We interviewed 15 employees and asked them questionsabout the companys activities in the areas of interest relating to therequirements of the MANGO Code of Conduct. Out of the 15 peopleinterviewed, 12 were selected randomly from the assembly line and the last 3directly from the chain.

    4.4. INTERVIEWS WITH REPRESENTATIVES OF THE COMPANY

    We met with the companys representatives at the companys head office andasked them a series of questions concerning the companys compliance withthe principles set out in the MANGO Code of Conduct (area of interest). Someof the questions were identical to those put to employees, so that we couldcompare the answers.

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    CSR AUDITORS REPORT4.5. INSPECTION OF THE FACTORY

    We inspected the premises (plant and offices) using graphic reproductionmeans. Despite being accompanied by a guide, we were able to inspect thefactory without interference from company representatives or employees, who

    complied with all the inspection requirements we had established for them. Allcommon areas, lavatories, production rooms, administrative rooms, entrancesand exits were inspected thoroughly. We took photographs and videos, withoutinterruptions, to analyse in detail the most relevant aspects to our audit.

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    CSR AUDITORS REPORT5. AUDITING TEAM

    The audit was performed by the following AUREN experts:

    - Marta Gir Via (Expert Auditor)

    - Oscar J. lvarez Civantos (Head of Audit and Expert Auditor)

    The auditors selected to conduct the audit on the compliance of MANGOsIndian suppliers with the requirements of the MANGO Code of Conduct havebeen submitted to a preliminary statistical analysis, so as to assess thereproducibility and level of accuracy of their knowledge of Indian regulationsand its application to the audited companies.

    Independent appraisers questioned them separately on the application of theCode of Conduct (the questions were posed twice and with an interval of a fewhours). Their answers were compared both with the information furnished by the

    Indian Ministry of Finance and Employment in relation to the application ofIndian regulations and with interpretations issued by the ILO.

    The results are outlined below:

    Appraiser

    Percent

    21

    100

    95

    90

    85

    80

    75

    70

    65

    95,0% C I

    Percent

    Appraiser

    Percent

    21

    100

    95

    90

    85

    80

    75

    70

    65

    95,0% C I

    Percent

    Date of study:

    Reported by :

    Name of product:

    Misc:

    Assessment Agreement

    Within Appraisers Appraiser vs Standard

    The auditors achieved a level of consistency of 100% and 93% (on the samequestions which, as explained above, were formulated twice with a few hoursinterval). As regards the accuracy of their appraisals according to theregulations underpinning the report, both auditors achieved a rate of accuracyabove 90% (100% and 93%, respectively).

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    CSR AUDITORS REPORT

    6. GENERAL DATA ON AUDITED FACTORY

    The most relevant management and organisational features of the APOLLO,ELTEX INDIA PVT. LTD. factory are listed below:

    Location887, Udyog Vihar, Phase-V, Gurgaon, Haryana, 122016India

    Length of the relationship withMANGO

    11 years

    Staff 150 employees

    Working times 9h30 to 13